Non-alcoholic fatty liver disease (NAFLD) is a common cause of chronic liver disease in North America. It is characterized histologically by either a fatty liver alone or steatohepatitis. There is increasing evidence that NAFLD is associated with insulin resistance. Insulin resistance is associated with increased peripheral lipolysis and fatty acid delivery to the liver for uptake, oxidation and resterification to triglycerides. Recent studies also indicate that NAFLD is associated with increased hepatic oxidant stress. However, the underlying dietary, psychological and social factors predisposing to development of insulin resistance and NAFLD have not been characterized. Also, the pathogenetic mechanisms natural history and health impact of NAFLD, particularly non-alcoholic steatohepatitis (NASH) are not fully known. Furthermore, there is no established treatment of NASH. The research plan includes: (1) An outline of the structure of a large database, to be used by a clinical network for studies on NAFLD, is described. Justification for the specific information to be entered is provided: (2) Studies are proposed to test two hypotheses: (a) that the rate of progression of hepatic fibrosis accelerates after the development of bridging fibrosis in patients with NASH, and (b) specific social and psychological factors contribute to the behavioral profile associated with insulin resistance as well as the likelihood of success of diet and exercise interventions in improving insulin resistance in such patients. These will be studied by (a) comparing the rates of progression of fibrosis by one grade in patients with NASH with or without bridging fibrosis over a 3 year period,, and (b) determination of eating and exercise behaviors, personality traits and psychopathology in those with NASH and comparison to a control group of patients with hepatitis C. Also, the relationship of these factors with the physiologic and histologic abnormalities present and the success of diet a nd exercise counseling will be assessed. (3) It is hypothesized that a two-pronged treatment approach correcting insulin resistance with an insulin sensitizer, pioglitazone, and treating oxidant stress with vitamin E is superior to vitamin E alone for the treatment of NASH. A prospective, randomized short-term ( 1 year duration) clinical trial to test this hypothesis is proposed. The primary endpoint is the necro-inflammatory grade. Both studies will require participation of the network.